Customer Joe Garza enters Magott’s Grocery & Market, a block east of St. Paul Square. The store been a fixture in the neighborhood since 1883.

Customer Joe Garza enters Magott’s Grocery & Market, a block east of St. Paul Square. The store been a fixture in the neighborhood since 1883.

Photo: Jerry Lara, San Antonio Express-News

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Scroll down to see a larger version of this graphic.

Scroll down to see a larger version of this graphic.

Photo: Mike Fisher

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Uncommon Fare co-manager Mariah Lange helps customer Ender Ergun, right, find peppers at the store on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Ergun lives on the third floor of the building and was looking for a last minute item for a dish he was cooking for his girlfriend.

Uncommon Fare co-manager Mariah Lange helps customer Ender Ergun, right, find peppers at the store on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Ergun lives on the

Uncommon Fare co-manager Mariah Lange rings up customer Ender Ergun, right, at the store on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Ergun lives on the third floor of the building and was looking for a last minute item for a dish he was cooking for his girlfriend.

Uncommon Fare co-manager Mariah Lange rings up customer Ender Ergun, right, at the store on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Ergun lives on the third floor

Craig Witherow picks out a loaf of gluten-free bread at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Witherow lives in the building and stopped by after his workout in the gym next door to the store.

Craig Witherow picks out a loaf of gluten-free bread at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012. Witherow lives in the building and stopped by

Veggies, fruits and sausage fill a display case at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012.

Veggies, fruits and sausage fill a display case at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012.

Photo: Lisa Krantz, San Antonio Express-News

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Toiletries and select household goods are also available at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012.

Toiletries and select household goods are also available at Uncommon Fare on the first floor of Cevallos Lofts in Southtown in San Antonio on Tuesday, Jan. 8, 2012.

Photo: Lisa Krantz, San Antonio Express-News

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Larry Magott, of Magott's Grocery & Market, attends to customers, Thursday, Jan. 10, 2013. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it was forced to relocate to its present location at 1314 East Commerce near Sunset Station.

Michael Sance waits for his order of fresh fish at Magott's Grocery & Market, Thursday, Jan. 10, 2013. He has shopped the store for 20 years. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it was forced to relocate to its present location at 1314 East Commerce near Sunset Station.

Michael Sance waits for his order of fresh fish at Magott's Grocery & Market, Thursday, Jan. 10, 2013. He has shopped the store for 20 years. The downtown grocery store opened on Commerce Street across from

Can food items for sale at Magott's Grocery & Market, Thursday, Jan. 10, 2013. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it was forced to relocate to its present location at 1314 East Commerce near Sunset Station.

Can food items for sale at Magott's Grocery & Market, Thursday, Jan. 10, 2013. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it

Soft drinks for sale at Magott's Grocery & Market, Thursday, Jan. 10, 2013. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it was forced to relocate to its present location at 1314 East Commerce near Sunset Station.

Soft drinks for sale at Magott's Grocery & Market, Thursday, Jan. 10, 2013. The downtown grocery store opened on Commerce Street across from St. Joseph's Catholic Church in 1883. With HemisFair '68, it was

Business is steady at Magott's Grocery & Market, a block east of St. Paul Square.

Most folks go in to play the lottery. Buying beer is a close second. One man buys a piece of fish from the meat counter in the back, for lunch later.

Magott's has been a fixture in the neighborhood on the near East Side since 1883, when Theodore Magott, a Polish immigrant, opened the store. These days, his grandson, Larry, operates the business at 1314 E. Commerce St.

While Magott's still is open after 130 years, other markets have come and gone, from Handy Andy to H-E-B.

But now, decades after the last major downtown supermarket shuttered, there are nearly 20 grocery stores — with footprints large and small — that already exist or are in the works within a five-mile radius of downtown.

Bexar County Commissioner Kevin Wolff and wife Sandi Wolff are behind one of the projects on the drawing board.

Locally based H-E-B, for its part, is exploring a center-city market concept. That spooks smaller operators, who say they're usually at a disadvantage when competing against large grocers because smaller stores have limited offerings and higher prices, making it harder to compete.

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And while the city plans to offer incentives to lure a store to the heart of downtown, some smaller stores believe they have no chance at landing the subsidies.

The prospect of H-E-B or another large grocer opening a downtown store worries Magott, to a degree. He said he doesn't feel H-E-B will put him out of business, but he does think it could hurt his bottom line.

He's also upset that the city, as he sees it, is assisting H-E-B in phasing out the little guy.

The last major grocery store downtown was Handy Andy at 902 N. St. Mary's St., next to El Tropicano Hotel. It opened in 1937 and closed in 1979.

In the 1950s and '60s, several chain stores operated on the fringes of downtown — Piggly Wiggly, Winn, Red & White, Hom-Ond, Stalling's and, of course, H-E-B. They're gone, and so are many of the smaller mom-and-pop stores that were the norm in the inner city.

In its next step in trying to attract a major store downtown, the city plans to solicit proposals from store operators within the next few weeks, Mayor Julián Castro said.

“This will give us a chance to evaluate what's out there,” Castro said. “We want to make sure we're not leaving anything on the table with anybody else. So this is a way to do that.”

In 2011, the City Council approved a $1 million grant for any grocery store company willing to open a location downtown. The funding, which expires in December, comes from interest on a federal economic development loan.

The city and H-E-B have acknowledged an ongoing discussion about a downtown store.

Sources say that if H-E-B builds a store, it likely would be near its headquarters, just south of downtown proper.

City officials claim a grocery store will spur more development and draw more residents to the urban core. Hence, their willingness to put up cash for the project.

But the smaller operators said that, because H-E-B has been the only company talking with the city, the money likely will go to it.

H-E-B officials, however, have said there are no current plans to open a downtown store. Yet they also note they've looked at grocery store models that work in other urban areas around the world.

“It is really important for us to be diligent about this decision and to make sure we develop a format that is going to accommodate the needs of a very diverse population in the downtown area,” H-E-B spokeswoman Dya Campos said. “We remain in communication with the city on different concepts and different formats that they would like for us to explore.

“We remain committed to keeping those conversations open, but at this time we do not have any announcements to make.”

Campos said it's too early to say whether the chain operator would pursue the $1 million incentive.

Viability

The city is expected to release a downtown grocery store study early this year that shows the urban core can support a market of up to 20,000 square feet. But not everyone is convinced of the findings.

“Anytime a city does a study, it's going to come out in favor of what the city wants,” said David Livingston, an industry analyst with the market research firm DJL Research. “The big grocery stores and the big grocery companies would do a much more sophisticated study than whatever would be provided by the city.”

An estimated 68,000 people work and 18,000 live in the downtown area, including the King William, Lavaca, Lone Star and River North neighborhoods. And there's a push for more growth. Still, Livingston said grocers also take into consideration crime, buying power, competition and how dollars are being spent for groceries in a given area.

He said it's hard to say if the Alamo City is ready for a downtown grocery store, adding that if one were built, it would require sufficient parking and a location accessible to pedestrian shoppers.

“At the end of the day, if H-E-B doesn't do it, nobody is going to do it,” he said.

A traditional big-box grocery store wouldn't work downtown, said Pat DiGiovanni, former deputy city manager and current CEO of Centro Partnership, a nonprofit that aims to spur development through public-private partnerships. Instead, he envisions a smaller neighborhood grocery store that people can walk to.

“The market will take off and eventually provide for the kind of support and amenities that come along with residential,” he said. “There are people that believe, however, that if we can get a grocery store on the ground, even when the market is not ready for it, it will spur additional residential development.”

Stroll to the grocery

People living in the core are looking for convenience, so a store they don't have to drive to would be ideal.

“I moved down here so I can walk to everything,” said William Moore, a resident at the Blue Star Arts Complex who has lived there for nearly two years. “I don't want to battle the interstate. I despise going (to the grocery store) even though the closest one is 3.7 miles away. It's all about convenience.”

Castro said his initiative will provide a more traditional grocery store downtown residents are looking for.

“There are many (stores in the area), but there are really none,” the mayor said. “Anybody who is around downtown knows that there aren't the same grocery amenities that you would find in many other parts of San Antonio.”

“I see this as a chicken-and-egg issue,” he added. “A strong grocery presence is something that many folks want in the urban core of the city, and also will help spur investment in downtown in the future.”

Kevin Wolff said the area near the Pearl Brewery redevelopment on Broadway is already there.

He's looking to open a 7,000-square-foot store that would offer produce, breads, meats and dry goods. He's already signed a letter of intent with the owner of a former car wash at Broadway and Newell Avenue, just south of the Pearl. Under the agreement, Wolff said he has until March to make a decision. It might come quicker than that.

“I was reticent at first,” he said of the venture. “But after looking at it for about a month, my level of excitement is much higher. There's a real possibility here. It's getting serious.”

“I came to the conclusion that if you're going to do this, it's the area to do it,” he said about location.

He estimates that a store that size could cost about $700,000 to open and operate for one year. Wolff, whose family had ownership stakes in the Sun Harvest stores and Green Fields Market, will not pursue the grocery incentive, he said.

He's betting on the residential growth in and around the Pearl to provide the customer base that would make his venture successful.

At the Pearl, a grocery store has been part of the development plan from the beginning. But nothing has stuck, said Bill Shown, managing director of real estate for Silver Ventures, the project's developer.

Shown said the firm concluded downtown couldn't support a store but that the market is changing, with a total of 950 multifamily units either online or scheduled to open this year.

Even though Shown said the Pearl has about 6,000 square feet that would be perfect for a grocery store, he's not opposed to Wolff's venture on the campus' outskirts.

“We don't need a grocery store at Pearl for Pearl to be successful,” Shown said. “We would love to see one in the neighborhood for the neighborhood to be successful.”

David Piedra lives close to the Pearl. He moved into the 1221 Broadway apartments in summer 2011. He says the stretch of Broadway he lives on, around the U.S. 281 overpass, is starting to become more populated and therefore could use a store.

“Ideally, a one-stop shop would be great,” Piedra said. “But even if it's a smaller selection, I'm sure with all the residents, it will get a lot of attention and business.

“I think the demand is only going to increase.”

Small fry

H-E-B's Campos wouldn't talk about how an H-E-B would affect smaller grocery stores downtown. But she said the grocer empathizes with them.

Matt Nguyen, who bought Hippo's Grocery and Deli on the ground floor of the Wyndham La Cascada condominiums about two years ago, is concerned with the possibility of a large grocer such as H-E-B moving into the area. The 1,200-square-foot market is about four blocks from H-E-B's headquarters, which is near where some close to the conversation speculate the grocer will put its store. He's worried that a larger grocer will lure away the customers his store struggles to draw.

“We're just a little guy,” he said. “H-E-B or any other store coming here will definitely hurt my business. We can't compete with an H-E-B. People can get everything from there.”

Currently, most of the traffic Hippo's sees comes from people staying at the hotel and La Cascada residents, Nguyen said.

About two miles south at the Blue Star Arts Complex, Joey Villarreal, the owner of Blue Star Brewing Co., has plans to open a more than 2,000-square-foot market that connects to his brewpub. He, too, is tense about a larger competitor opening nearby.

“I'd be fooling if I didn't think about it,” he said of a potential downtown H-E-B. “Going head-to-head with H-E-B would be ridiculous. But what we're doing needs to be done.”

While he can't compete, Villarreal and others aim to find a niche that would give them a chance. In his case, Villarreal will focus on locally sourced goods to sell at his store, which will have produce and meat sections, deli and bakery, he said.

About two blocks from the arts complex, Josh Levine, owner of Uncommon Fare, a 900-square-foot market on the ground floor of the Cevallos Lofts, admitted that a downtown H-E-B would hurt his business because of his limited selection and higher prices. Instead, he will focus on expanding the organic prepared foods the market offers to help distinguish his store.

He doesn't believe the city should provide an incentive for a store to be built. But with the money up for grabs, he's ready to throw his hat in the ring.

“They don't need to incentivize it,” said Levine, who also owns and operates MBS Fitness gyms in and around downtown. “But if they want me to open 10 (grocery markets) and give me $1 million I'm prepared to do it. I'm definitely going to inquire.”

Magott sees it a different way.

He won't bother throwing his name in the hat for the $1 million incentive.

“(The city) wouldn't do it,” Magott said. “They'll only give it to H-E-B or Wal-Mart.”